Recession Watch : UK stock market
As soon as the US credit crunch began we saw a significant fall in the UK stock market with investors running for the hills amid concerns the crisis would transfer to the UK in a short space of time. Unfortunately, this doomsday scenario did occur and within a matter of weeks the UK financial sector was in the grip of panic with finance becoming more and more expensive and the UK economy taking a dive.
However, interestingly over the last few weeks, despite the deluge of negative reports on the economy, the UK stock market has rebounded. Led by the UK banking sector, which many now believe is out of the woods, there had been a small increase in confidence even before recent reports suggesting the UK economy may be turning. As we have covered on a number of occasions, the UK stock market is one of the most accurate "information dissemination" markets in the world and is often said to be able to predict the state of an economy up to 8 months ahead.
It is worthwhile keeping a very close eye on the UK stock market as an indicator as to whether the UK economy has finally turned or whether in fact we are seeing the emergence of another false dawn. At this moment in time many people believe the economy is starting to stabilise but we will need more concrete evidence from the financial and business arenas before a final analysis can be carried out.
Share this..
Related stories
Royal Bank of Scotland to be scaled down
This week will see plans unveiled for the substantial scaling down of the Royal Bank of Scotland banking operations. Over the next 3 to 5 years it is expected that 25% of the balance sheet will disappear as the group returns to basics for future stability. The banking operation will also see up to £300 billion of potentially toxic investments moved into its separate operation which will be wound...
Read MoreInvestors advised to cash in shares
Drops in the value of equities means that a move into cash is advisable, Standard Chartered Private Bank has indicated.According to a note from the financial firm, investors should become "underweight" in shares within their portfolio - in order to take advantage of cheap deals as prices continue to fall in months to come.The comments come following another month of credit crunch-induced turmoil o...
Read MoreOne million immigrants set to leave UK over next five years
The debate regarding foreign nationals working in the UK is set to intensify over the coming months with an announcement by the Institute for Public Policy Research which has today released findings suggesting that up to 1,000,000 immigrants will leave the UK over the next five years. The reason for these forecast moves is simply the fact that the UK economy is struggling and job prospects are not...
Read MoreITV in complete chaos
After the most turbulent period in the history of ITV, things got worse today with news that Chairman Michael Grade, brought in as the saviour just a while ago, will be leaving the company in the short term. He is said to be in dispute with the rest of the ITV board regarding attempts to recruit former chief executive of BSkyB, Tony Ball.
Aside from the fact that Tony Ball's wage de...
UK inflation nearly twice the average European rate
A report by the Organisation for Economic Co-Operation and Development has today highlighted the problems which the next UK government will face with UK inflation nearly twice the average rate in Europe. This means that the cost of living in the UK is rising twice as fast as anywhere else in Europe at a time when the UK government is drowning in a sea of debt and public sector investment is set to...
Read More